This thesis introduces a structural econometric model of demand exhibiting direct network
effects. The structural approach we follow allows us to identify the extent of network effects
and compatibility between competing networks. To the best of our knowledge, this is the first
model that facilitates the identification in the case of direct network effects. At the same time,
it is the first attempt to assess the degree of compatibility in an econometric framework. The
model is then applied to investigate demand for mobile telecommunications service and the
link between adoptions of ISO 9000 standard and international trade. The estimation results
allow us to formulate some interesting policy conclusions.